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tax cuts and lending bills. are the interests of small business owners being held hostage by washington's political infighting? and the new breed of young entrepreneurs. how they're forging their own paths to profits. that and more coming up next on "your business."
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hi there, everyone. welcome to "your business" where we give you information and advice to help your business grow. there is a lot of talk in washington about hlping small business but it remains to be seen what kind of relief, if any, small business owns are going to see. this week president obama reiterated his opposition to extending e bush tax cuts, an idea that republicans and many small business owners oppose. he pressed republicans in the senate to work with democrats and help pass his small business lending legislation. >> if the republican leadership in congress really wants to help small business, they'll stop using legislative maneuvers to block and up or down vote on a
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small business jobs bill that's before the senate right now. right now. this is a bill that would do two things it would cut taxes for small businees and make loans more available for smallses. busines. >> where did all of this leave small business owner fighting it to survive in a challenging economy? todd mccracken supports extending the bush tax cuts. and we alsome have a member of bush's economic council of advisers. todd, you support extending the tax cuts. how do you think that will help small business? >> right now is a bad time to raise anybody's taxes. we think that the current rates ought to be extended at least temparily while we sort out through this recovery. you have to remember that most small businesses pay taxes at
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the individual rate. so whatever the individual rates go to, that's what you're most successful small companies will have to pay and those are folks in the best position to add jobs and grow their businesses and this is the wrong time to tax them all we think. >> by most accounts it's a very small percentage of people who will be affected by this who ow small businesses. >> there's lots of different ways to calculate that. it certainly is true that most small business owners would not facehese higher rates. we have no quarrel with that fact. as i just said, the ones that will face higher rates are the ones who are most successful who are most likely to be growing and who are most likely to be in a position to add employees, which is what i think we want this economy to do an we shouldn't be discouraging it. >> donald, you have taken a hard look at it. what affect would it have on small business to extend the tax cuts? >> you hav se a political debat where both sides are exaggerating their positions. as todd just said, this famous 3% number that only 3% of small
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business oers are up there at the top is true technically but those are the largest most successful small businesses and you would expect them to be the ones that are most likely to hire people. on the other hand, a lot of folks who show up in the data as though they are small business are not someone that you and your viewers would view as being small businesses. they are people who invest or llc'd themselves to become an independent consultant and you see most of the income affected at the high level is not really anything having to do with small business. >> does it have something to do with customers? one of the big issues that keep hear from small business is lending is an issue and other things are an issue but really the issue are customer have disappeared. what would extending or not exnding these tax cuts to top earners have any effect on that? >> extending any tax cuts will have the affect of putting more ney in people's pockets and helping them be better consumers during a time period where the economy is quite weak. that affect is probably larger for low and moderate income
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folks than it is at the high end which is why you hear folks suggest let high end ones phase out. i suspect you agree with that, odd. >> that was close to what i was going to say. i would point ou a big piece for this is lending piece. we get more money in their hands and ey can hire more people and they will help grow the economy by going out and spending and add other businesses. that's why we actually support the small business jobs ll before the senate next week and i agree with president oma. >> do you ha faith it will get passed? >> i'm cautiously optihemistic will get through the senate next week. the question is thenre what? it's different than the house bill. >> i have to say, todd, another thing at i hrteard a lot and partularly from a lot of bankers is money isn't necessarily always the issue. th have the money to lend. they'rnot lending it forer a variety e other things like the regulations or they just want to keep cash on hand or one i hear
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a lot is we're not geing enough good applications. >> yeah. i hear a whole variety of those things as well from bankers. the reality is i think some of that is true for certain bankers in certain places at certain times. it's not the case across the board in all community banks. if you're a business trying to grow and you've been turned down for reasons you don't know at two or three banks, you won't ke -- you will not hear that has a bank in iowa money lend. ou'll give up and go to running siyour day-to-day siness and not expand. t we have to make sure the money available where and when people are looking for it. >> fm y ur vantage point does it look like anythingill get done? iteems like there's a lot of squabbling goingown in washington right now and small businesswners are brought out from one side and then the other side and almost pawns in this whole thing. >> yes. we're in that season here in washington. congress will be in session for another month and then they have to go home and run for re-election and there will be a
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mixture of serious policy debate campaigning.e publi >> you have hit it on what's driving small business owners crazy that they hear from both sides how much they are impoant and everyone wants to do something for small business but it doesn't quite ever seem to get done. >> we're certainly going to follow this closely and see what happens and hopefully something happens to help small business owners. thank you both so much. >> thanks. >> thanks for having us. >> what do facebook, google and apple all have in common? they are companies started by young entrepreneurs so we decided to take a look at what young people are doing today. this is the story of two booming businesses started by two young women who are breaking all of the rules.
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sophia drifted from job to job before she became her own boss. >> i made doughnuts at midnight. i scrubbed ring around the collar off men's shirts at a dry cleaner. i did landscaping. >> when she started her san francisco vintage clotng company nasty gal at age 22, she had no money, no college degree and no small business experience. >> i was almost forced into this to survive and to find something that i enjoyed doing. >> laney has never had the chance to work for anyone else because she started her business when she was 11. >> all i've ever done is work for myself. it would be hard to get used to working for somebody else. >> both women ar entrepreneurs with successful internet businesses and after enjoying the freedom of being the boss, neither can imagine ever working any other way.
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always a good eye for fashion and a unique nse of style. she parlayed that into her ebay business in 2006. >> it was profitable immediately. vintage clothing as a good margin. sometimes i would buy think for $20 and at auction they would sell for $100 or $200 or $300 depending on how many people were interested in it. >> the power of the nasty gal grand comes from 20 sothing fashionistas who follow the website. she's built up a huge network of customers across myspace, faceboeok and twitter. >> we have 7,000 twitter followers. almost 15,000 facebook finans. and i think something like 30,000ri myspace friends. >> with a thriving business on ebay, she got that restless feeling that led her to jump from job to jump and ebay was
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crimping her style. in 2008 she made the risky decision to leave the online auction world and start her own website. sh >> ebay gave they a chance to brand the business but i wanted to grow something bigger than ebay would allow me to. i got tired of having rules where i couldn't write things in feedback or link to my own website. >> now nasty gal sends trendy new clothing along vintage duds and she's racing to keep up with demand. >> the business is growing at a pretty alarming a rate. it's actually growing faster than we can control. it's pretty insane. >> laney's pittsburgh, pennsylvania, company simple sugars is also grappling with the challenges of a fast growing business.
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now 16 and five years into starting her all-natural sugar scrub company, she's juggled homework, crewing and business after school. >> it's hard to balance everything. i get up at 6:00 in the morning and go to school and i don't get home until 7:30 at night and have homework and simple sugars work to do. >> with products already in her local whole foods and a thriving business online, the time has come for her to relocate simple sugars out of her parents' basement. her next move is renting office space and hiring ployees. big steps for a teenager running a business in her spare time. >> it's starting to be too much volume for me to handle by myself. i need somebody who can come in and help me do things like pack up and sp out orders because right now i'm spending too much time working in my business and not enough time working on it. >> ron morris, professor of entrepreneurial studies at duquesne university and host of
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radio show american entrepreneurs, say the novelty of her youth is what makes it exciting. without it simple sugars would just be another cosmetics company. >> she has got to exploit her youth and freshness and i said to her unfortunately two more years from now you'll be 18 years old and you'll be another 18 year old. i know that sounds callus and hard but it's true. because she's the product. not the substance. >> in order to have her best shot at mang simple sugars into a million dollar company, morris gave surprising advice. >> i said if i were you, i would drop out of school immediately and spend the next year or ovtw to push this company over the top. i said rightow you've got one shot in ten of hitting a home run. each year that goes by i think you can when she's 18 she has
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one shot in 100 and at 21 it will be one shot in 10,000. >> may seem to break all conventional rules to become a full-time entrepreneur and put high school on hold, that's what entrepreneurs do best. break the rules. >> i really want to take advantage of all of my opportunities with simple sugars but i don't want to give away my high school experience but i really think i have a lot to learn from taking a year off and working on my business. that would be equally as valuable as what i could learn in a year at school. >> so w it worth it to give up school? did she make that decision? we can find out because she's here today joining this week's board of directors. thank you for coming on the program. also joining our board of directors we have danielle and jody snyder. designers and owners of a fashion jewelry label and
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lifestyle brand. great to see you young entrepreneurs. fun for me. thanks for coming on the program. so, are you in school or no? >> not completely. i'm actually taking a year of independent study this year. my school has allowed me to complete the english and history courses on my own so technically i'm still a junior and technically i will still graduate this year and i'll be able to go back next year. >> waking up in the morning running your business. i thought my life was busy. seeing yours i thought i was sleeping in the park. >> it was crazy. i had to choose between continuing to grow my business or continuing with my high school education. so now instead of spending my whole day at school trying to fit in my simple sugars work i'm spending my day on simple sugar work. >> you have been making jewelry since you were kids starting your company in your early 20s. many people would look at you and say you are missing a lot of
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experience. how can you start a business that will be successful? what do you gain by doing it when you're so oung? >> you are more fearless when you are young. everyone says it's daunting to have your own company and people want to know have you written a business plan? if we have written a legitimate hardcore business plan to present to investors in the beginning, we may not have done it. >> you bring something new but you are fearless but you are also coming from different perspective. in this economy wh's going on with the fashion in general like we started the company right when women were spending less money. for us we use social media and able to use jewelry for women to update their looks and not buy a new wardrobe. finding a way to do a business that people weren't doing. >> i like the point about you being fearless. what i loved in your piece is you can't imagine working for anyone else. and hopefully won't ever have to. but the fearless part is
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interesting. you still have to do what a lot of entrepreneurs in their 40 s, 50s, and 60s have to do which is figure things out. they may be older but don't hae the experience necessarily in getting fun and being marketing and so how did you figure it out? do you have advisers? >> i think it's important to have advisers. anyone no matter of your ag when you start a company you don't know how to do everything. the best advice we were given was find people who know how to specialize in areas that are your strengths and seek themut for advice. >> that's exactly what you said. >> how do you do that? you're 16 years old. you were in your young s. how do you give someone advice as not a hobby but believe in you that your company will work. >> that's something i struggled with. since i'm so young people have been really willing to give advice but not really. they'll want to help me because i'm so young just to be nice but then a lot of times they either
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don't take me seriously so they'll start doing something and stop and won't really do a good job. >> how did you get people to take you seriously? this is the same for a 40 year old with a crazy idea who doesn't have experience in that world. >> it's tough. you have to find the right person who is willing to take you seriously and then prove to you that what you're doing is legitimate and not just some kind of thing that some kid is making up. >> did you guys hav that same issue? >> yeah. it is really difficult to find someone that will take you seriously. you are 16. >> look, young 20s -- >> once you have proven watching your piece that you sell your product at whole foods if you looked at me and i saw your product was already sold and you had things to back up what you already started, i would take a meeting with you. i think that one thing danielle and i did was we found people
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in other fields. sometimes people aren't going to be willing if they're a competitor to give advice but every entrepreneur goes through the sa struggles and the same challenges so it's finding people maybe in a different industry that can help. >> i think you guys are all three very impressive and it's amazing to watch these businesses grow at such a young age. thanks so much for this discussion. >> thank you. >> a laptop is an essential tool for entrepreneurs of all ages. here are five of the best courtesy of entrepreneur magazine. the style conscious computer user may want to check out dell's vostro v13. if you work in an outdoor setting, a cost effective alternative is getac. for people looking to travel
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light, the idea pad weighs just three pounds and less than an inch wide. for the user who needs serious computing power, the time line x provides high end performance for $750 and if you are a mac person, the full mac experience and you can add on microsoft office suite of programs. when we come back, our young entrepreneurs off more insight as they judge today's elevator pitch for a new line of organic teas and the retired executive who is young at heart starts his dream business. a wild west dude ranch. [trumpet playing "reveille" throughout]
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reviving the economy means reinventing the way we do business. here's to the owners showing us the way. [trumpet playing "reveille" fades to silence]
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>> our young entr iepreneurs kn what it is like to need investors to make your small business grow so let's see what they have to say about today's elevator pitcher trying to brew up interest in her organic tea company. >> hi. mp mobile connect imports its exclusive brands of tea to the u.s. currently distributed online internationally through our tea club and dining facilities and soon retail at marvelous markets on capitol hill, maryland and virginia. what's special is its packaging and its story. this is banana green tea wrapped
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in papers. the concept of my company was to teach the mostly women farmers how to use the resources of the rain forest such as sun, leaves, water to create sustainable economics in a business in the u.s. our company is oking for $300 to purchase inventory to go to scale. investors can expect competitive rate of return through convertible debt financing. we're hoping that you'll joinass as we look out to affect local and global communities throughout the spirit. >> all right. you did a great job. the secret is she's also a performer. i expected great things out of this elevator pitch. let's hear what the panel thinks. danielle, how did she do? >> she had solid points and was very focused on the sustainability of it providing economic opportunity. it sounds like a unique type of tea with packaging and you have great distribution. she did a great job. >> did she hit the points you would need to hear?
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>> hard to get the points across in a minute. i love the packaging and concept and i love tea. maybe more business info because i would want to know the research that you already did, what the consumer thinks or where your target is to sell the maybe more time to hear where you will sell it and what the overall response has been. >> maybe more about the finances. >> did you taste the tea? taste it. while i'm saying thank you for coming on the program, would you take another meeting? >> i would. >> the tea is great. >> thank you. good luck with everything. you're doing great work. >> if you have a product or a service and you want feedback from our elevator pitch panel and your chances of getting interested investors, send us an e-mail. clude a short summary of what
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your company does, how many money you are trying to raise and what you intend to do with that money. you never know. someone oute watching the show may be interested in helping you. it's not just young people who are starting up small businesses. today we revisit a baby boomer who quit one career to get a shot at starting a new one. kee. >> after 20 years as a military man, he retired from the air force academy in 1988 but he hasn't slowed down. on the contrary, he's kept on acoming. >> i've tried to retire twice and what i'm finding is i can't turn my brain off.
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>> my husband just is an entrepreneur. what can i say? he likes starting new projects. >> the route he first took after retirement was typical. he used his skills and contacts to build a consulting business. ♪ inform 2007, schmidt sold his consulting company and bought this dalic 86-acre ranch in the texas hill country andal though that finally he was ready to head out to pasture. problem was, he just couldn't stop working. >> the honest truth is this business evolved out of emotions, passion for the old west, more than a business plan. we're from texas'v. we've got to wave the flag. my business plan was to grab a hammer and start driving nails. and i drove enough nails until i felt a money pinch and i stopped and i waited to see if the business would generate return on investments.
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we built a very small piece of the town, about a dozen buildings. and my feeling was if it doesn't work, we'll stop. wee not going to invest the whole thing at the beginning. >> and now instead of a quiet house on the prairie, he and his wife own a full-blown old west tours theme park/exotic animal farm/movie set for hire/cporate event facility. >> sometimes it cares me because whatever he says comes to pass and we have had a successful business. >> i run into lots of people that have ideas on how to do a business, but ideas without the determination to execute and to see it through just don't mean anything. ♪ where have all the cowboys gone ♪ >> what's impressive about schmidt's second retirement enterprise beyond the crazy costumes and strange looking animals is at the age of 56, he entered a business field he knew
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nothing about. >> starting a business after 50, if you're going down the same lines of where worked for years, you're going to be using all of that knowledge to push you forward. i sttharted a business that i w totally unfamiliar with. >> but schmidt sayshahat while there are challenges with being an older entrepreneur, he does get the benefit of decades of experience. >> there is a high level view of what you're trying to be. and truly a leader has got to be able to see the big picture. if a lead ser buried in the details, you can't lead because you don't know where you're going ♪ an old cowboy went riding out ♪e dark and windy day >> sometimes may feel like searching for the best airfare takes more time than actually flying. if that's the case for you, o website of the week can help.
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hip tries to simplify booking a flight. plug in the cities you're traveling in between and the site will organize all of your options in an easy to read chart. you can sort flights by flights, schedule and the number of connections. to learn more click on our website. it's open business. you'll find all of today's segments plus web exclusive content with more information to help your business row. and don't forget to become a fan of the show on facebook. we look forward to getting some of your feedback. you can follow us on twitter at msnbc your biz. next week, meet an entrepreneur who thinks it's actually good business to promote businesses other than her own. >> if you're in a situation where you're closing yourself off not only from your peers but even your competitors, you're not going to be able to grow they're not going to be able to grow. >> why taking orders for a competitor is even considered fair game. till then it, i'm j.j. ramberg.
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remember, we make your business our business. [trumpet playing "reveille" throughout] reviving the economy means

Your Business
MSNBC September 12, 2010 7:30am-8:00am EDT


TOPIC FREQUENCY Washington 4, Us 4, Schmidt 3, Danielle 3, Laney 2, Texas 2, U.s. 2, Google 1, Todd Mccracken 1, Obama 1, Todd 1, Boomer 1, Goingown 1, Sophia 1, Dell 1, Publi 1, Laptop 1, Kee 1, Ron Morris 1, Facebook Finans 1
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